Public bodies expenditure: aggregated data for 2022-23

What we are doing about costs

Scottish Government is driving and supporting efforts to release resource through a series of key efficiency programmes.

The Single Scottish Estate (SSE) will help us have a more efficient approach to public sector property management, optimising costs, enabling the delivery of excellent public services and providing staff with great places to work, recognising the shifts in working culture since the pandemic. The SSE engages with all parts of the public sector including health and local authorities as well as central government bodies. The programme is currently focused on the public sector administrative estate and is undertaking a number of location-based reviews and projects including across Perth, Edinburgh and Glasgow. We are estimating £50-80m total savings from now to 2028, with associated carbon reductions and improvements in service delivery to the public. An overall total of £36m of direct Single Scottish Estate benefits have been secured in the first year of the programme. I encourage all bodies to consider SSE principles and engage with the programme team early to develop efficient future estate options.

The Commercial Value for Money programme (CVfM) is providing commercial expertise and support across Scottish Government expenditure to deliver increased value for money through monetary efficiencies and/or increasing impactful policy outcomes delivered. This includes aligning similar spend to reduce costs and increase outcomes, benchmarking and commercial scrutiny of costs to understand how we are spending money and development of novel funding approaches such as income generation. Support is being provided to monitor the effectiveness of our spend to delivery policy outcomes through the development and implementation of performance monitoring metrics and through understanding the wider economic impact of our spend in relation to Scottish jobs and SME spend. Almost £7m of cashable and £600k of non-cashable savings have already been delivered, with little or no impact on policy delivery. The CVfM programme is projected to save up to £50m over the next 5 years whilst also supporting other efficiency work.

Collaborative procurement can help public bodies achieve better value for money, through consolidating volumes, driving efficiencies and social value and making better use of skills and resources. The Scottish Government establishes national collaborative procurement framework agreements on behalf of the whole Scottish public sector. There are opportunities to increase Scotland’s collaborative buying power by expanding the use of National Collaborative Frameworks across the Scottish public sector, leading to a significant increase in financial benefits delivered on a cross-sectoral basis via economies of scale. Building on current financial benefits delivered annually of around £120m, made up of both cost avoidance and cash savings, work is underway to scope the potential to scale up the service offered by the national collaborative procurement team.

The Central Government Procurement Shared Services (CGPSS) provides access to a team of highly skilled procurement professionals who can cover skills gaps and workload peaks within Central Government organisations to deliver contracts which comply with procurement legislation. CGPSS can also support the development of procurement policy and procedures, deliver procurement training courses and provide mentoring to an organisation’s own buyers and end-users. The service design is sufficiently flexible to be tailored to each of the diverse organisations within the sector. Central Government organisations across Scotland can access the services on either a fully managed (including a lite version) or project basis. The service has provided procurement support to over 50 Central Government (CG) organisations since the outset. The aim is to continue providing accessible, cost effective and high-quality procurement services to support the delivery of improved organisation-specific procurement.

The Shared Services Programme began by implementing Oracle Cloud in 2024-25, transforming the HR, finance and purchasing capabilities for Scottish Government core and 32 public sector clients. This modern cloud-based platform will drive efficiencies across finance, purchasing and HR functions through a combination of adopting standardised businesses processes, operating model optimisation over time, improving data quality and implementing new, regularly updated technology that replaces decades-old systems. Oracle Cloud provides a platform onto which other public sector customers could be onboarded in future, reducing the burden on procuring, implementing and managing their own solutions for the delivery of their corporate functions.

To support efficient and effective government operations and advance AI enabled automation maturity across Scotland's public sector, the Intelligent Automation Centre of Excellence (IACoE) is evolving from a centralised model to supporting federation. This strategic shift is supported by the development of a National Collaborative Procurement Framework for Intelligent Automation, which supports the acceleration and scaling of faster, nimbler and cheaper AI enabled Automation technologies across our public services, transforming the countless daily tasks across the public sector which are repeatable processes carried out on a mass scale in order to operate more efficiently, serve our citizens better and provide more satisfying work for our staff. It provides the public sector with the expertise, guidance, standards, and resources needed to transform how they operate using AI enabled automation, while ensuring alignment with national objectives. This drives economies of scale and builds specialised skills across public sector staff.

Since established in 2021, the CoE has positioned Scotland as a global leader in AI-enabled automation, driving transformative changes in public service delivery with a citizen centred focus. Through this shared service, government and executive agencies have realised substantial benefits, including reduced delivery costs, enhanced compliance, increased operational capacity, and significant cost savings. To date, 143 automations have been implemented delivering £3.9m in cost-avoidance benefits to date and projecting £14.5m by 2028-29.

The transition to a federated model, guided by the National Collaborative Procurement Framework for Intelligent Automation, empowers the public sector to independently develop AI enabled automation capabilities. This federated approach enables us to share successful strategies, avoid duplication of effort, and address individual needs, thus improving operational efficiency across the public sector. For example, over the next three years, AI-enabled automation initiatives under this model have the potential to unlock additional capacity of 20 to 40% across the Public Sector, enabling more efficient, effective, and innovative public services for all citizens.

The Digital Programme is a key area of work delivering a new framework for digital service transformation, including the introduction of Scottish Government level control of digital investments through prioritisation; based on business need and contribution to digital public services. A portfolio approach to how Scottish Government manages and implements digital projects will ensure delivery of a portfolio of projects that is right sized to available funds and capability. The programme is focused on building capacity and capability in-house to replace the need for external suppliers and contractors; and has already delivered over £3m in savings through the digital recruitment service. The development and re-use of a common approach to delivery including common components (such as SG Cloud Service, ScotAccount and ScotPayments) reduces design and implementation costs associated with the creation of systems as we identify opportunities to adapt products we have already developed for multiple purposes – delivering a seamless experience for users as we do this. The SG Cloud Service is live and our ScotPayments and ScotAccount services are both in beta, delivering cashable savings for public bodies.

The core Scottish Government workforce has been following a strategy to reduce in size since March 2022, to adjust to the budgetary context and the change in the profile of its work following the Covid-19 pandemic. This direction accords with the wider work on medium term financial planning and in-year path to balance, as well as aligning with wider Public Service Reform ambitions. Enhanced recruitment controls were introduced at the start of the 2022-23 financial year to achieve this strategy.

In 2022-23 and 2023-24 the total Scottish Government workforce (i.e. directly employed and contingent workers) reduced by 0.4% and 3% respectively. This is the first time the workforce has reduced in consecutive years since SG began publishing workforce statistics in 2012. For the remainder of 2024-25, the presumption against external recruitment has been further strengthened. The Scottish Government works closely with partner bodies to share best practice and approaches to workforce planning. Work to roll out recruitment controls across the wider public body landscape is underway and opportunities are being assessed to remove duplication between and within public bodies.